XML 34 R20.htm IDEA: XBRL DOCUMENT v3.6.0.2
Note 13 - Intellectual Property - License Agreements
12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
License Agreements [Text Block]
1
3
. Intellectual property—license
agreements
 
The Company entered into
three
license agreements by which it has secured certain patent rights that are necessary to make, use and sell the T-SPOT.
TB
test. One of these license agreements, with Oxford Innovation, was terminated in connection with the assignment by Oxford Innovation to the Company of certain intellectual property rights in
November
2013.
The Company has ongoing obligations to make certain payments to Oxford Innovation while the assigned patents remain in force in certain countries. The Company’s existing license agreements related to its T-SPOT.
TB
test, as well as its previous license from Oxford Innovation, are generally exclusive in the stated field, cover a worldwide territory, are royalty-bearing and give the Company the right to grant sublicenses. The Company has minimum royalty obligations under each existing license agreement, which continue so long as patents licensed under the agreement remain unexpired. The minimum contractual royalty payments, including ongoing minimum payment obligations to Oxford Innovation, after
December
 
31,
2016
are set forth in the commitments and contingencies table in Note
15
“Commitments and contingencies” to these consolidated financial statements.
 
The Company incurs royalties under each existing license agreement, has incurred royalties under the Oxford Innovation license agreement, and will incur continuing payment obligations to Oxford Innovation that are treated as royalties in these financial statements, based on its product and service revenue. The aggregate royalty expense relating to the
three
license agreements amounted to
$6.8
million,
$5.1
million, and
$4.8
million for the years ended
December
 
31,
2016,
2015
and
2014,
respectively. The Company paid other license-related expenses, including patent prosecution expenses, milestone payments and assignment fees due to these licensors, amounting to
$0.2
million,
$0.2
million, and
$0.1
million for the years ended
December
 
31,
2016,
2015
and
2014,
respectively. The aggregate royalty rate paid by the Company in the years ended
December
 
31,
2016,
2015
and
2014,
as a percentage of the gross product and service revenue of the Company, was
8%,
8%
and
10%,
respectively.